Bangladesh c.bank to hike rates to 9%, chief tells BBC

Bangladesh’s central bank, Bangladesh Bank is set to raise interest rates to 9 per cent from the current 8.5 per cent in the coming days, Governor Ahsan H. Mansur told the BBC in an interview on Thursday.

The move, Mansur said, aims to curb soaring inflation, which reached 11.66 per cent in July. The decision comes amid ongoing political unrest, dwindling foreign reserves, and a decline in exports from the garment industry.

Mansur, a veteran economist who spent three decades at the International Monetary Fund (IMF), was named governor of Bangladesh Bank last week by the interim government headed by Nobel laureate Muhammad Yunus. He has indicated that further interest rate hikes may be necessary in the coming months, potentially reaching 10 per cent or more.

In addition to raising interest rates, the governor is also in discussions with the IMF to increase the size of the existing $4.7 billion bailout programjme by an additional $3 billion. Bangladesh Bank is also seeking additional funding from the World Bank, Asian Development Bank, and Japan International Cooperation Agency.

Bangladesh’s economy, once one of the world’s fastest-growing, has faced significant challenges in recent years. The World Bank’s total commitments to Bangladesh amounted to $2.85 billion as of June 30.

Attribution: Reuters & BBC